Back To All MessagesThe fact that the Republicans are so desperately searching for places where they can cut deductions to fund their huge tax cut for the rich is worth discussing. The Repubs have a serious accounting problem on their hands. Their ability to give corporations and wealthy families a giant tax cut is restricted by the requirement they not add more than (a whopping) $1.5 trillion to the federal deficit over the next decade. So they’re trying to increase revenue by raising taxes on many middle-class families and compounding that harm by cutting spending on health care.The Senate bill will eliminate the Affordable Care Act’s requirement that people have health insurance or pay a penalty. Republicans assert that doing this would free people from an onerous government mandate. What they don’t say is that without the mandate, some younger and healthier people would not sign up for coverage, so insurers would raise premiums knowing that their remaining customers would be more likely to have health problems. Those price increases would make coverage unaffordable to many middle-class families. The Congressional Budget Office estimates that 13 million Americans would lose coverage — although it could lower that estimate — and, based on the current projection, the government would save about $338 billion over 10 years because it would spend less on insurance subsidies and Medicaid. In addition, they want to cut the deduction for medical expenses exceeding 10 percent of income.

The actual budget hole is smaller than $1.5 trillion because the GOP budget is scored on a “current law” baseline. This assumes that tax breaks that are “current policy” will expire and more revenue will flow to Treasury. This is worth more than $400 billion over 10 years, which means the budget “hole” is closer to $1 trillion out of the $43 trillion the Congressional Budget Office projects in revenues over the next decade. In other words, this is a modest net tax cut even assuming no additional economic growth.

CBO’s roughly $43 trillion revenue estimate also depends on a projection of average economic growth of 1.9% a year. But the U.S. economy has never grown that slowly for so long. CBO says that every 0.1% increase in GDP adds about $270 billion in revenue over 10 years. That means a mere four years at 3% growth—the U.S. historical norm—could fill a $1 trillion hole. An average growth rate of even 2.4% over the decade would more than fill the hole. The Tax Foundation predicts the Senate plan will produce more than $1 trillion in revenue, in part thanks to an investment catalyst from immediate capital expensing in the first year.Another false charge from the left is that the GOP bills are merely a tax cut without any reform. But the bills eliminate trillions of dollars in loopholes, such as the state and local tax deduction. The House bill caps the mortgage-interest deduction at $500,000."-WSJ 11/27

No, Thomas, we have acknowledged that there are some good gimmicks in the tax bill which would simplify the tax code. What we oppose is the reality that it will, as you acknowledged, balloon the deficit. Noel did an excellent job of laying out the many problems we need MORE money to handle, not less.Voodoo economics has NEVER worked. Deficits have ALWAYS increased after cutting tax revenue when the government is already in deficit. No amount of double talk can change that.

No, the problem is not with the math. It is with your and WSJ deliberately trying to confuse the issue. Noel is correct. 1.9/3.0=1.58 or a 158% increase not 100%. To have a 100% increase you would have to have 1.9+1.9=3.8%Glad you are retired and no doing taxes anymore.

The increase is from to the final point; not from the final result. And, a decrease would be the amount of decline divided by the starting point. The key is the starting point. The statement regards the increase (or decline).

"To calculate the percentage increase: First: work out the difference (increase) between the two numbers you are comparing. Then: divide the increase by the original number and multiply the answer by 100. If your answer is a negative number then this is a percentage decrease.Percentage Change | Increase and Decrease - Skills You Needhttps://www.skillsyouneed.com/num/percent-change.html" - This is a real cite to a real fact. Maybe you can get a twofer here in terms of education.

Thanks for proving my point about your lack of financial sophistication. It will be interesting if you actually have the ability to admit a mistake - I doubt it.

No, the WSJ is not trying to confuse anyone; you are simply confused by definition.